The government today launches the latest phase of its grant support system for renewable energy such as solar panels and wind turbines for public sector buildings such as schools - but there is no new money for the scheme in spite of the recent Stern Review.

Trade and industry secretary Alistair Darling said the £50m of support over the next 18 months would boost the use of renewable energy production under the government's Low Carbon Buildings Programme (LCBP) administered by the DTI. He appealed to public bodies to apply for grants under the scheme.

The latest tranche of funds is part of the overall £80m the government has made available for the LCBP and was announced by the chancellor, Gordon Brown, in the March 2005 budget. Local authorities and schools will be able to get grants of 50% for solar photovoltaic panels and around one third for wind turbines, ground source heat pumps and solar thermal panels, which produce hot water.

"It is vital that we cut the CO2 emissions from our buildings if we are to reach the UK's 60% reduction target by 2050. Combining energy efficiency measures with the fitting of microgeneration technologies on schools and other public sector buildings can and will make a real difference," said Mr Darling.

He added that the attraction of the micro-generation technologies would be boosted by Mr Brown's announcement in last week's pre-budget report that any electricity sold by households or schools back into the national grid would not be subject to income tax.

Green groups, though, have been critical of the relatively small sums available for renewable energy generation compared to the scale of the challenge identified in the Stern Review.

The government recently suffered an embarrassment when the household stream of the LCBP grants system, totalling £6.5m over three years, ran out of funding half way through the current financial year.

The DTI diverted more funds into it from other parts of the scheme's £80m budget but Mr Brown did not add any new funds in the PBR.